Currency strategists have little expectation that FX traders will see nothing other than an additional weakness for the Pound in the months ahead, given these circumstances.
The Pound Sterling edged higher against a weakened greenback as risk sentiment improved during the London trade on Wednesday. Sterling was not able to gain any headway against its EU rival, the Euro, however, given concerns over the Brexit transition and the worsening situation of the UK economy in light of the Coronavirus pandemic. Currency strategists have little expectation that FX traders will see nothing other than additional weakness for the Pound in the months ahead, given these circumstances, and also because they expect the Bank of England to provide even more stimulus, further depreciating the currency.
As of 11:08 am in London, the GBP/USD was trading at $1.2613, up 0.4908%, moving off the session peak of $1.26280. The EUR/GBP was trading at 0.9063 Pence, down 0.2103%; the pair has ranged from a session low of 0.90515 Pence to a peak of 0.90897 Pence. The GBP/JPY was trading at 134.881 Yen, up 0.2192%.
FX Traders Shift Focus to Canada
Shifting focus across the Atlantic, FX traders will watch for the release of the Bank of Canada policy statement. Analysts believe the central bank will hold interest rates at the current 0.25%, but what will be more telling will be the accompanying statement and the monetary policy report. The fall in oil prices, coupled with the repercussions of Covid-19 on the Canadian economy, will likely be part of the discussion. On Tuesday, the US and Canada decided jointly to extend the cross border restrictions as a result of the worsening health situation in much of the US. Currently, the USD/CAD is trading at C$1.3572, down 0.30%; the pair has ranged from C$1.35698 to C$1.36211 in today's session.